Manitoba Parties Are Ignoring the Real Issues

From the rhetoric coming from political parties and interest groups, you might think that Manitoba's election is a referendum on the direction of the province. This couldn't be further from the truth.

Rather than dealing with the province's long term challenges, the political class is focused on policies that no party is advocating, and solutions to problems that don't exist. The NDP, with substantial help from public sector unions, are trying to make the case that the Manitoba PC Party would privatize Manitoba Hydro and cut services "like they did in the 90s." Never mind that cuts in federal transfers shaped the Manitoba policy landscape back then. The PCs are so sensitive to these attacks that they have consciously shaped their campaign trying to reassure voters that they aren't much different from the NDP, and that is a problem.

Despite what the NDP says, the Manitoba model it proudly touts is an illusory fiscal mess. Since taking power in 1999, the current government has increased spending by 65 per cent, 2.75 times faster than the rate of inflation. A $1 billion dollar proposal to reroute transmission lines to avoid building on "pristine forest land" is the highest profile example of the attitude that no amount of money is too much to appease fringe interest groups. Debt has increased by $6 billion during this period, and is now roughly half the size of its annual budget and growing. Federal transfers have grown from 32 per cent of the budget in 1999 to 37 per cent last year. Over the longer haul such a path is unsustainable. The NDP has promised that they will balance the budget by 2014.

Looking at the global financial turmoil, one might think that the PCs would be the adults and offer up a credible plan for reigning in the debt as soon as possible. Yet one of the first things that PC Leader Hugh McFadyen did on the campaign trail was to claim that the NDP proposal to balance the budget by 2014 wasn't realistic. Instead, he vowed to balance the budget by 2018 which is hardly the tough medicine the province needs.

Sadly, the policies that the NDP are attacking the PCs for are policies that would help to reposition Manitoba's economy. Ever higher debt and transfers aren't sustainable in the long run. In fact, increasing transfer payments has merely served to increase the size of the public sector, which can hold back private sector job growth.

Commendably, the PCs have at least given lip service to weening the province off of transfer payments, even though their campaign, like the NDP and the Liberals, has focused on a series of on micro-targeted policy gimmicks.

With the exception of the Liberal pledge to end Manitoba's job-killing payroll tax, all parties are betting on boutique tax-and-spend policies, targeted at specific voters. A PC pledge for sports tax credits -- a policy spearheaded by the NDP -- designed help win hockey mom votes, and a home renovation tax credit aimed at middleclass homeowners are but two examples.

NDP promises, such as funding 50 police officers to walk a specific beat in downtown Winnipeg, paving back alleys, and PC promises, such as hiring more nurses and building community centres are clearly aimed at winning over specific ridings. Odds are no one will think of these micro-pandering promises when they head to the ballot box since the average voter's concern is the economy. It should also be the biggest concern of the parties, who are deliberately ignoring the forest for the trees.

The one issue the PCs have a rational electoral reason to avoid is privatization. The unions are putting up billboards accusing them of wanting to privatize hydro because they know that it will scare some voters away from the PCs. But this is a self fulfilling prophecy. Standing up for privatization is unpopular because no one is willing to make the case that the province's highest profile example of privatization was successful -- but it was. MTS, the former government run telecommunications company was privatized in 1996 under the last PC government. Since then, MTS has performed far better than it's Saskatchewan based twin SaskTel, which remains government owned. It now has twice the revenue, and three times the assets of SaskTel, while employing 20 per cent more people. Privatization lead to job growth, and increased revenue to the province. But the NDP's union base isn't much interested in these facts. They're perfectly happy to let public sector unions to conjure up the privatization bogeyman to scare people away from the Tories. The fear mongering helps the NDP electorally, but isn't doing Manitobans any favours.

Manitoba doesn't need the provincial government to provide five new police officers in Brandon, or boutique tax credits aimed at every conceivable demographic group. Politicians need to fundamentally rethink the economic model on which the province operates. They could learn a lot from reforms undertaken by their two western neighbours. But until political parties respect the voters enough to present honest solutions to difficult public policy challenges, the Manitoba will continue to be a subsidized poster child for low performance government, and will remain the West's only have-not province.

Steve Lafleur is a policy analyst with the Frontier Centre for Public Policy (www.fcpp.org). You can follow him on Twitter @Steve_Lafleur.